BlackRock Canada: iShares ETFs Deliver Strong Capital Gains Distributions for 2024

BlackRock Asset Management Canada Limited ("BlackRock Canada"), an indirect, wholly-owned subsidiary of BlackRock, Inc. (NYSE: BLK), has announced the final annual reinvested capital gains distributions for the iShares ETFs listed on the TSX or Cboe Canada for the 2024 tax year. The distributions, which are typically reinvested in additional units of the respective funds at the year-end, do not include ongoing monthly, quarterly, semi-annual, or annual cash distribution amounts. The additional units will be immediately consolidated with the previously outstanding units such that the number of outstanding units following the distribution will equal the number of units outstanding prior to the distribution.

The record date for the 2024 annual distributions will be December 30, 2024, payable on January 3, 2025. The actual taxable amounts of reinvested and cash distributions for 2024, including the tax characteristics of the distributions, will be reported to brokers (through CDS Clearing and Depository Services Inc. or “CDS”) in early 2025.

The reinvested capital gains distributions for the iShares ETFs varied significantly across different funds, indicating that the performance of the underlying assets in each ETF had a substantial impact on the distribution amounts. For example, the iShares Global Infrastructure Index ETF (CIF) had the highest reinvested capital gains distribution per unit at $3.00439, while the iShares 1-5 Year Laddered Government Bond Index ETF (CLF) had the lowest at $0.03381. This variation in distribution amounts can be attributed to the different performances of the underlying assets in each fund.

The estimated December cash distributions for the iShares ETFs, announced on December 19, 2024, also varied significantly across funds. The iShares Emerging Markets Fundamental Index ETF (CWO) had the highest estimated cash distribution per unit at $1.02645, while the iShares S&P/TSX SmallCap Index ETF (XCS) had the lowest at $0.05372. These differences in cash distributions can also be attributed to the varying performances of the underlying assets in each fund.

Investors can employ several strategies to manage the tax implications of these distributions, such as tax-loss harvesting, holding ETFs in tax-advantaged accounts, dollar-cost averaging, using tax-efficient ETFs, and charitable donations. By understanding the factors contributing to the changes in distribution amounts and employing appropriate strategies, investors can effectively manage the tax implications of these distributions and potentially enhance their long-term portfolio performance.

In conclusion, the iShares ETFs listed on the TSX or Cboe Canada have delivered strong capital gains distributions for the 2024 tax year, with significant variation across different funds. The performance of the underlying assets in each ETF played a crucial role in determining the distribution amounts. Investors can manage the tax implications of these distributions by employing various strategies, ultimately enhancing their long-term portfolio performance.